What Matters to Individual Investors? Evidence from the Horse's Mouth

By James J. Choi, Adriana Z. Robertson. Journal of Finance, 2018

152 citations recorded by the source corpus.

We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare disasters, transactional factors, and fixed costs of stock market participation. Individuals tend to believe that past mutual fund performance is a good signal of stock-picking skill, actively managed funds do not suffer from diseconomies of scale, value stocks are safer and do not have higher expected returns, and high-momentum stocks are riskier and do have higher expected returns.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/19905c6193c3863fc1b9df9e149432890cb9c9e5

Citations in the corpus

• Five Facts about Beliefs and Portfolios (2019, unknown): “Choi et al. (2009) show that personal investment market performance in 401k plans leads to more savings, a form of reinforcement learning.”